Cameroon Resumes the Implementation of Progressive Elimination of Customs Duties Under the EU-Cameroon Economic Partnership Agreement (EPA)
By Jacob A. Akuo, Esq., Co-Founder | Partner | International Trade Expert
Email: jacobakuo@dayspringlaw.com
On January 1, 2020, the Directorate General of Customs in Cameroon announced (via its official website)[1] that the progressive liberalization, that is to say, progressive elimination of customs duties under the EU-Cameroon EPA was going to resume on the same day.
Cameroon had hitherto suspended implementing this obligation on August 4, 2020 citing the COVID-19 Pandemic and its ensuing financial damage as a justification. As a matter of fact, Cameroon just like every other country in the globe has seen the Pandemic severely harm its economy. Things are especially austere for Cameroon because the country relies heavily on import duties (tax) to finance its budget.
In a letter to the EU Representative in Cameroon (Mbodiam, 2020), Cameroon’s Minister of Economy relied on article 31 of the EPA (which relates to bilateral safeguards measures), to justify the suspension of Cameroon’s obligations of progressive elimination of tariffs on products originating from the EU. The EU pushed back on this justification underscoring that the Pandemic and its ensuing financial damage to the economy of Cameroon does not justify Cameroon taking unilateral safeguard measures under article 31 of the EPA that will suspend the progressive elimination of customs duties. The Minister of Economy in a subsequent letter cited article 57 of the Vienna Convention on the Law of Treaties to justify such a suspension.
Even though in my opinion, these legal provisions relied upon by Cameroon to support the suspension measure are at worse not relevant to their justification, and at best debatable, the EU allowed Cameroon to proceed with the suspension on condition that it resumes these obligations by January 2021.
A little bit of context here:
Cameroon and the EU reached an EPA on December 17, 2007. The EU Parliament approved the EPA on June 13, 2013 and Cameroon ratified same on July 22, 2014. Provisional application[2] of the EPA took effect as from August 4, 2014.
Under article 20 and 22 (respectively) of the EPA, products originating from Cameroon enjoy a duty–free, quota-free access to the EU markets. In exchange, Cameroon undertakes to progressively eliminate tariffs and custom duties on all products originating from the EU based on well-defined rules of origin.
The progressive liberalization or elimination of tariffs or customs duties on goods originating from the EU is done in phases, with each phase having a duration of one year. These phases cut across three identified categories of goods as negotiated by both Parties in the Schedules of Concession of Cameroon.
Category 1 includes goods essential for the industrial development of Cameroon, which Cameroon does not domestically produce. They consist of mainly industrial machines (pumps, generators, turbines, etc.), electrical equipment (transformers, capacitors, resistors, etc.) and certain chemicals. (Commission, 2020) Phase 1 of effective elimination (then 25%) for this category commenced on August 4th, 2016 and has since evolved to 100% elimination of customs duties by Cameroon as of August 4, 2019.
Category 2 includes goods such as transport and construction material (Commission, 2020). Cameroon effectively commenced elimination in this category on August 4th, 2017 (15% then). By August 4th, 2019, Cameroon was at phase 4 of effective elimination which saw the country remove 45% tariffs for goods in this category. As earlier mentioned, the country was supposed to enter phase 5 elimination by August 4th, 2020 but suspended same on grounds of the Pandemic and its ensuing financial damage to its economy. This is the phase that has now commenced on January 1st, 2021 and shall see the elimination of 60% of import duties.
Category 3 includes products such as cars, motorcycles, fuel, cement, etc. Even though it is considered as phase 5 elimination, effective elimination of customs duties technically only commenced on January 1st, 2021. It was equally supposed to start on August 4th. 2020 but was pushed to January 2021 for the same reason of the Pandemic. This phase will see Cameroon eliminate 10% tariffs for all products in this category originating from the EU.
It is important to emphasize that, the EU has urged Cameroon to initiate phase 6 eliminations by August 4th, 2021 in accordance with the original timeline that was agreed in the EPA. This essentially means that phase 5 eliminations as explained above shall only last for eight months after which phase 6 eliminations will kick in as originally scheduled.
Notwithstanding the progressive elimination obligations of Cameroon under the EPA, there are a few agricultural and non-agricultural products which Cameroon considers very sensitive to their domestic market for which liberalization or progressive elimination of customs duties shall not touch on in order to protect domestic industry and fiscal revenues. They include products like flour, most types of meats, wines, spirits, malt, milk products, wood, wood products, clothes and textiles, paintings, used tyres. (Commission, 2020).
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[1] See official announcement at the the official website of the Directorate General of Customs http://www.douanes.cm/douane/index.php/fr/actualite/122- accessed on January 10, 2021.
[2] Provisional application because the EPA was supposed to be entered into by the EU and the CEMAC Member States, the rest of which have still not approved same.